What do you do if you forget to add a creditor onto your Ch 7?

[mom2crazies]

I'm wondering what happens if you forget to add a creditor to your chapter 7 and it has already been discharged.

I have a friend who was just discharged in a Chapter 7 bankruptcy case in December. She had forgotten about some PayDay loans that are now being collected on. She said she is filing a chapter 13, now.

I'm confused. Can she file a 13 in order to take care of these creditors in addition to the 7 that has already been discharged? Or, will she have to convert all of the chapter 7debt that is already discharged over to the 13 and basically "re-do" the entire bankruptcy?

[debee]

Her options depend on a couple of things: was the forgotten debt dischargable and was she a no-asset case?

If yes to both, then the discharge likely applies to the forgotten debt as well so long as she informs them.

Most jusrisdictions don't require the debtor to reopen a no-asset chapter 7 in order to add the forgotten creditor so long as the debt is dischargeable. She can inquire with the attorney who handled her filing to confirm.

Provided the debt was dischargable (not fraud, etc) and she was a no asset case, there would be no viable creditor objection and no assets to distribute so whether the creditor finds out at time of filing or after discharge is not such a big deal because either way they still find out in a "timely manner" because they get nothing and like it.

So if her debts are dischargeable and she was no asset, she should inform the forgotten creditor in writing that she has filed bankruptcy & been discharged & was a no-asset case and provide them with her case number.

[BKParalegal]

You can file a chapter 13 but not receive a discharge if it is filed within 4 years of a chapter 7 discharge and you have to pay 100% of your debts.. She could file a motion to reopen her 7 and add the creditors but I bet you she continued with payday loans after filing and now has new post petition debt. Payday loans are like heroin for some people

[mom2crazies]

She just told me it was private student loans and taxes. I think her lawyer was an idiot. I guess they were trying to get a special circumstance for the loans (which I didn't know existed) and I don't know what they were thinking about the taxes. So, I don't know what she is going to do. I don't think you can include either in a chapter 13. Let me know if that is wrong.

[kornellred]

The only debts a debtor is responsible for are the debts that appear on a credit report. A credit report review is essential in any type of BK filing. All valid pre-filing date debts will be on the credit report. Your attorney would be responsible for the oversight. A filing does not occur until the paperwork is reviewed and signed by the debtor.

[nohope]

I didn't know that a debt not appearing on your credit report you wold not be responsible for. My lawyer told me to give him any and all debts I knew about. I included a few that did not appear on my credit report (they totaled over $40K).

[tobee43]

first, are you certain?....did your friend's chapter 7 get dismissed or discharged??

if it was dismissed she can refile...if not, and the debt wasn't listed she may have a problem...she can't file a chapter 13 right after a discharged 7.....

in as much as what's only on a credit report...actually our credit report was so incorrect we would had been in the deepest of problems if we only used the credit report....as if one thinks just off the top of my head i can think of at least 5-6 debts that simply do not ever get reported, however, i certainly listed them on our petition....

best of luck to your friend

[mom2crazies]

It was discharged, but I don't think there is anything that she can do. One of the debts is her private student loans and the other ones are federal and state taxes. From what I understand, they are not dischargeable in bankruptcy.

[debee]

Income tax debts can be discharged in a bk, they just have to meet certain requirements. Even if the tax debt doesn't qualify for discharge (perhaps because it's too new), I believe filing a 13 would put a stop to the interest and penalties.

[indeep59]

What about debts to another person? That doesn't appear on any credit report. Example, an ex gf lent me 10,000 a few years ago to help me with my struggles, no paperwork, nothing signed. I always planned (and still do plan) to pay her back somehow. However, post discharge bk7 (July '10) and it's still a struggle with a lower income. I did not list her as a creditor.

Since she's an ex she recently contacted me to remind me of the debt. Like I said I plan to pay her back,just may be awhile.

[mom2crazies]

It won't be involved in the bankruptcy unless she were to obtain a judgment, but I don't think she could even do that without a signed document.

[LadyInTheRed]

The only debts a debtor is responsible for are the debts that appear on a credit report.

That's not true. A credit report is a good tool to make sure you don't forget to list creditors. But, a creditor does not have to report a debt to a credit agency for it to be a valid debt. All debts of a debtor are supposed to be listed on the petition.

What about debts to another person? That doesn't appear on any credit report. Example, an ex gf lent me 10,000 a few years ago to help me with my struggles, no paperwork, nothing signed. I always planned (and still do plan) to pay her back somehow. However, post discharge bk7 (July '10) and it's still a struggle with a lower income. I did not list her as a creditor.

Since she's an ex she recently contacted me to remind me of the debt. Like I said I plan to pay her back,just may be awhile.

Since you admit the debt exists, you should have listed her as a creditor and that debt would have been discharged. Even if it were discharged, you could pay her back if you wanted.

It won't be involved in the bankruptcy unless she were to obtain a judgment, but I don't think she could even do that without a signed document.

I think that is a response to indeep59. The ex gf doesn't need a judgement to have the debt be part of the bankruptcy. You don't need a signed document to have a debt, but it does help to prove there is actually a debt if the debtor denies it.

[kornellred]

Looks like LadyInTheRed has called me out on this rather touchy subject. I contend (and that means nothing, actually) that the only debts that a debtor is responsible for are the ones that are listed in a credit report. Of course, that is not true, except in a legal sense. You can borrow "x" amount of dollars from a friend or relative, and then file for bankruptcy, but that does not mean that you no longer owe the money. It just means that unless the lender can provide proof that the debt is owed, they cannot petition the trustee to obtain disbursements in relief of the debt. Beyond that, my further contention is that virtually all lenders, secured or unsecured, are involved in the credit reporting scheme as traditionally configured, and that would be in their own best interests. Bypassing routine reporting channels has got to be a very rare occurrence.

Therefore, if a debtor forgets to mention a debt owed, and it is not accounted for in the debtor's credit report, and the bankruptcy petition gets filed, how in heck is the unreported creditor going to legally demand payment of the debt?

[newbie2]

Looks like LadyInTheRed has called me out on this rather touchy subject. I contend (and that means nothing, actually) that the only debts that a debtor is responsible for are the ones that are listed in a credit report. Of course, that is not true, except in a legal sense. You can borrow "x" amount of dollars from a friend or relative, and then file for bankruptcy, but that does not mean that you no longer owe the money. It just means that unless the lender can provide proof that the debt is owed, they cannot petition the trustee to obtain disbursements in relief of the debt. Beyond that, my further contention is that virtually all lenders, secured or unsecured, are involved in the credit reporting scheme as traditionally configured, and that would be in their own best interests. Bypassing routine reporting channels has got to be a very rare occurrence.

Therefore, if a debtor forgets to mention a debt owed, and it is not accounted for in the debtor's credit report, and the bankruptcy petition gets filed, how in heck is the unreported creditor going to legally demand payment of the debt?

Credit reports are so often wrong that it would be foolish to only include debts that show on the report.

If a debtor "forgets" and they remember it after filing, the bankruptcy case can be re-opened to list that creditor. Yes, it costs a bit, but in the long run it is worth it. How will the unreported creditor legally demand payment? Same way all creditors do - with a lawsuit. Indeep knew about the debt, didn't list it on his petition, and the friend has every right to either go after him for repayment or be acknowledged as a creditor in his filing.